What’s the waterfront real estate market doing right now for Lake Martin?

At the end of May 2017 – (all agents, all brokerages over the entire Lake) 150 waterfront homes were sold for the first five months of the year. Compare that to 2015 – the best year ever in my opinion, 119 were sold, and we are 30% ahead of that year. For 2016, 107 waterfront homes were sold which makes us 50% ahead of last year.

These numbers are really remarkable when you see that inventory is down about 10% this year.

Waterfront lot sales at the end of May totaled 26 which is down 24% from the best year ever, 2015. For the same period ending in May 2016, 29 lots sold. Inventory of waterfront lots is down 30%.

So what does all of this mean? We are in a classic seller’s market!

If I can help you with buying or selling your waterfront home or waterfront lot give me, John Coley, a call! I would love to help.

Not too long ago, I read a pretty interesting article in The Wall Street Journal (WSJ). The article was written by Leigh Kamping-Carder and was on page M1 of the Friday, April 14, 2017, edition. The headline was “For Sale… For Years.” It was an interesting study of luxury homes in the U.S. The key statistic examined was “Days On Market.”

Days On Market (DOM) is a figure that is closely tracked in the real estate industry. It is measured from when a home is first listed by a real estate agent to the time when the sale is closed.

I don’t know if there is a perfect number here, but I do think that economists watch trends. If the DOM in a region or the nation is rising, that could indicate a shift to a buyer’s market. Maybe the number of homes available for sale is rising or the number of willing buyers is decreasing.

Practically speaking, DOM comes into the conversation when an agent is talking with a prospective seller. The seller might ask, “How long will it take to sell my house?” The agent might answer, “The average days on market in our area is X,” in an attempt to estimate.

Since the WSJ is a national paper, its focus is usually macroeconomic – the big picture, coast to coast. The published observation was made in February, and the average DOM for all homes in the nation was 53 days; however, it was even higher for homes considered to be in the luxury category.

For those homes, the average DOM was almost double at 100 days. Then the author took it a step further and looked at the most expensive 10 percent of homes. That portion was 34 percent higher than luxury at 134 days. So the difference between the average home in the U.S. and the top 10 percent was almost triple the amount of DOM. Said another way, it takes almost three times the number of days to sell a top 10 percent home than it does an average one.

Naturally, this piqued my interest about little ole Lake Martin. Would we hold to national trends?

I took a look at the Lake Martin Multiple Listing Service (MLS) to derive some answers. Our MLS doesn’t have every single home sale in the lake area. For instance, a home sold “For Sale By Owner” wouldn’t be included, and occasionally developers choose not to publish every sale in the MLS. But, it does have a very high percentage of waterfront sales – I would hazard a guess at 90 percent of them. I think it is an extremely reliable indicator of value. Besides, local MLSs are where newspapers like the WSJ get their information.

I don’t often explore the non-waterfront section of our MLS, but this article made me curious. Which type of home has been selling more quickly lately? Waterfront or non-waterfront? And how would that stack up to the national average?

When comparing to the national numbers quoted in the WSJ, I decided to use more than one month here at Lake Martin. We are in such a tiny market; monthly statistics can be heavily influenced by one or two outlying sales.

My first step was to take a look at the average home sold in our area. According to the numbers reported by our MLS to the Alabama Center for Real Estate in 2016, using every home that sold, both waterfront and non-waterfront, the average Days On Market was 177. That is quite a bit higher than the national average of 53 DOM in February.

Then I looked at waterfront homes only. I found that in the three months ended March 31, 2017, the average Days On Market for waterfront only homes was 187. I can’t say that I was surprised. The 187 here at Lake Martin is a lot higher than the nation’s overall luxury market average of 100 DOM. But, we do follow the nation’s trend in that our luxury sales take longer than the average home sale.

What if I looked at the highest 10 percent of sales in the Lake Martin MLS?

When diving into these types of statistics, especially in a small market like ours, it is easy to end up comparing short-term results to long term ones. It would not be entirely accurate to compare, say, one summer month’s sales to an entire year or five-year trend. Since the WSJ article cited February, I wanted to be close to them with my end date. On the same token, we can’t really compare monthly sales in our tiny market to national statistics.

Therefore, I chose to look at an entire year but to end that year on March 31, 2017. In the 12 months from April 1, 2016, to March 31, 2017, 337 waterfront homes were sold. The top 10 percent would be about 33 homes. The top 33 homes sold in that period ranged from $825,000 to two homes that sold for $2 million. Those 33 homes had an average Days on Market of 166. The lowest was a home that sold in zero days, and the highest was one that took 532 days to sell. But the average was 166, or about 11 percent lower than overall waterfront’s 187.

This finding was very curious to me. Up until now, Lake Martin has followed the national trend. A home for sale in our “luxury market” (waterfront) takes longer to sell than the average. But we buck the trend when it comes to the top 10 percent of highest priced homes sold. The national trend of 34 percent higher DOM than luxury did not hold with us.

I have a theory as to why. The top 10 percent group is pricing homes more accurately. There might be more buyers in that segment proportionally, but that would be hard to measure. We know we are in a seller’s market, so the overall market direction can’t be to blame. The same agents are selling the top 10 percent that are also selling the rest, so that is a constant. That is how I arrive at price. It is about all that is left to explain it.

I am not surprised that Lake Martin’s Days On Market is higher than the national average. We are always higher in that category, no matter what type of market – a sizzling seller’s or a drought-filled doldrum. We have limited supply and about 80 percent second home ownership. As my fellow agent John Christenberry said, “We deal with buyers that don’t have to buy and sellers that don’t have to sell.”

(advertisement courtesy of The Alabama Department of Archives and History)

If you are curious about old cabins around Lake Martin (some maybe from the 1950s as advertised above) you are not alone. Here’s a question one of my buyers emailed me the other day:

Q: We have been renting houses on Lake Martin for years. This past weekend we took a long boat ride looking around. We saw several old cabins that looked unused. Just curious as to if these ever go up for sale?

A: Thanks for the email. That’s a great question. I see old cabins around Lake Martin all the time, too. Most (99%) of the time there is a reason for it. Like, maybe it’s an old family cabin and they can’t decide what to do about it. I can’t blame them, because it is hard to give up on generations of memories!

Or maybe the person has decided to hold on to it in order to get more when they sell in the future, but doesn’t want to fix it up. I can’t blame homeowners like this, either. Historically, Lake Martin (like most waterfront real estate markets) has had very high appreciation over the long term.

Or, maybe the owner would sell it but they have a crazy high price in mind (this happens a lot). Honestly, I can’t relate to home owners like this. I know that your home is “one of a kind” – but people will compare to others. When buyers come to Lake Martin, they typically will walk through seven or eight homes per visit. This is after whittling down a list of twenty they found on the web.

My rule of thumb is, if they want to sell it, it would be on the market. These type of cabins get calls, emails, and letters from people all the time (mostly agents) that want to buy it. They are presented with many opportunities, so if you as a buyer contacted them, you will likely be joining a long list of interested parties.

A more likely scenario happens when home owners call me and ask what I think their Lake Martin property is worth. At least those folks are considering selling, but not always. With a second home market like Lake Martin, you’re dealing with buyers that don’t “Have” to buy, and sellers that don’t “Have” to sell. That makes it kind of unique.

When I helped Pat & Betsy buy their waterfront home on Lake Martin, I set a personal sales record of which I am very proud.

Before you groan and think I am just another real estate agent boasting about my earnings, this record is not about the money. It wasn’t a gajillion dollar sales price and commission (although it was very nice).

No, they set my record as my longest looking buyers. I’ve been working with them to find their perfect home on Lake Martin for a while. Take a second to watch the video and see how long it has been and what the first thing they planned to do after closing. It seems there was a slight disagreement.

The reason I mention this is I find that when helping some Lake Martin home buyers they feel they can’t start talking with me because they aren’t ready to buy tomorrow and don’t want to “waste my time.”

I always tell them 1.) there is no way you are going to set the record for my longest looker, and 2.) that it’s not a “waste of time” and we can look at their pace.

I am not a high pressure real estate sales guy. I understand that finding a lake house can sometimes take a while, especially here at Lake Martin. That being said, there are plenty of people that I help that find their dream home on the first day. But the majority of successful outings happen like – they contact me (through phone, web or the Lake Martin MLS) – we start talking, we prioritize for matches that come on the market in the future. We talk some more and they give me feedback, then come up to see some homes. That way, when we are looking, there’s a good chance we are looking at “maybes.” If they don’t find their one on that trip, we rinse and repeat.

Just so you know, Pat and Betsy weren’t Lake Martin newbies. In fact, they were two of the more experienced “lakey” buyers I’ve ever had the pleasure of helping. They knew exactly where they wanted to be on the lake, knew how they would use the home, and knew when it was right for them and their family to pull the trigger.

It wasn’t a nine year frantic search, instead it was a slow and steadily monitoring, knowing what was right for them.

Are you ready to break their record? I hope someone is! Contact me here or at the number at the top of the page and let’s get started.

Below is a chart from ACRE. For August 2016 – 30 homes were sold (all agents and brokerages). Compare that to August 2015 – 37 homes were sold. That is down about 19%.

If we look at our year to date numbers- 214 homes at Lake Martin were sold through the end of August 2016. For the same period in 2015 – 245 homes were sold – resulting in a decrease of about 13%.

How about lots? Waterfront lots year to date (again through August 2016) sold were 44. Last year, 67 lots were sold at the end of August. So, lot sales are down about 30%, which is a pretty significant number.

Inventory of homes is still way down – 25% from last year. I’m still seeing a lot of pricing pressure because Lake Martin has a lot of homes for sale but fewer homes are selling.

What does all of this mean? What is the interpretation? I looked at the 5 year average waterfront home sales for the month of August and also the 3 year average of sales. The average for 5 years in August is 30 and for 3 years is 36 – still sort of inconclusive.

I think we still need more information – let’s see what the 4th quarter is going to do and also I would like to see what the 1st quarter of 2017 will do. And then we can decide if 2015 was an anomaly – the Muhammed Ali of all years or a sign of a general trend that means we hit a market peak in 2015.

I don’t know yet, but I can promise you I will stay on top of the numbers and do my best to keep you updated.

If you have any questions about this or more specifically how these numbers affect your home give me a call or email me – John Coley at 334-221-5862 or [email protected].

Lake Martin had its best year ever for waterfront real estate sales in 2015. Sales were better in 2015 than in the big real estate days of 2005. Please take a look at this market report for the Lake Martin waterfront real estate market. I shot this video in January with preliminary numbers, but they held true:

The Lake Martin real estate market report for 2015 reflects record numbers of waterfront homes sold and waterfront lots sold.

As you can see in the above chart waterfront home sales in the Lake Martin area were 24% ahead of the previous high in 2014 – with 360 sales in 2015.

And looking at the chart above waterfront lot sales were 15% ahead of 2014 – with 85 sales in 2015.

Keep in mind, these numbers are compiled from the Lake Martin Area Association of Realtors’ Multiple Listing Service*.

The bottom line for Lake Martin waterfront real estate sales in 2015:

The bottom line is that we had a fantastic year here at Lake Martin. If you have been reading this blog or my column on AL.com, you know that all of 2015 has been outstanding. It really was just a matter of how great it was going to be.

Any time that any real estate market beats the prior year in number of sold units, that’s a great year. We have been doing this in the waterfront segment of Lake Martin since 2008, with no signs of slowing down.

What, if any, were the disappointments in the Lake Martin real estate market in 2015?

I had hoped for the “Triple Crown” – that is, 1.) Top year number of waterfront homes sold, 2.) top year of number of waterfront lots sold, and 3.) increase in waterfront home prices. While we definitely had the top number of waterfront homes sold on Lake Martin, and also an increase in pricing, we did not have the top year in number of lot sales. It’ snot like we had a bad year in lot sales. 85 sales is nothing to sneeze at, but it did not best the previous record of in 2005.

What about the future? Won’t the election hurt sales at Lake Martin? Or China’s economic slowdown? Or [insert your favorite doom and gloom item here]?

I think the Lake Martin waterfront real estate market is set up for another wonderful year in 2016. I don’t pay attention to macro-economic trends and I darn sure don’t listen to the so-called NAR economists. I watch the local numbers. As long as we are beating the prior year, I am not calling an end to this bull market. Beating the same month from the prior year is per se an increasing market.

For example, as great as 2015 was here at Lake Martin, please note that 9 waterfront homes were sold in January of 2015. Compare that with 12 sold in January 2016. As a market, we have already sold as many waterfront homes in the first 17 days of February 2016 than we did in the entire month of February 2015.

In other words, 2015 was hot, but 2016 is starting hotter!!

When it slows down, trust me, I will be the first one to call it. I am not afraid to point out that the emperor has no clothes. But until then, don’t worry about the price of tea in China because it apparently is not affecting Lake Martin real estate.

If you have any questions, please contact John Coley with Lake Martin Voice Realty at 334 221 5862 or emailing directly at john (at) lakemartinvoice (dot) com.

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Copyright notice – the above, and every other post on this blog, is the property of John Coley, Broker, Lake Martin Voice Realty. Appraisers may use my information in their appraisals without charge or asking, but please give me credit by citing me, my company name and title, and website address of http://lakemartinvoice.com. If anyone else would like to use this information, please contact me here and ask. I probably will let you do it, just please ask!

(*)Disclaimers: All of the above info was taken from the Lake Martin Area Association of RealtorsMultiple Listing Service. Accuracy is not guaranteed but deemed reliable. The above does not include sales by FSBOs or developers that sell privately and not through the MLS. But, I do think that the above represents a very large majority of all waterfront sales on Lake Martin, Alabama.

Lake Martin home sales have been great, but what is the magic statistic that lets us know if home prices are on the rise?

Is there a magic statistic that lets us know that Lake Martin waterfront home prices are on the rise? I decided to look at a months of inventory, which I think can give us a better inclination if prices will be rising. If you are not familiar with the term, months of inventory can be found by taking the number of homes for sale now and dividing it by current month home sales.

In the case of July 2015, we had 359* waterfront homes for sale at Lake Martin, and we sold 42 waterfront homes on the whole lake, that’s all agents, all brokerages. That gives a months of inventory statistic of about 8 1/2 months. This means that if we sold at that rate in 8 1/2 months, we would run out of homes to sell.

It’s hard to tell if that’s the magic number or not. I like to look at trends and see where that number is going. I don’t really peg my hopes on any one statistic. Looking over some of the past years, in 2014 there was 11.1 months of inventory with 376 waterfront homes for sale on Lake Martin. In a year, our ratio has gone down with less homes for sale and more sales, which is great for sellers.

To get some perspective on this statistic, I wanted to look at the best and worst summer months the Lake Martin real estate market ever had. If you look at July 2007, one of our worst summer months, there were 475 homes for sale and a months of inventory number of 43.18. Terrible. Our best summer month we have ever had, May 2005, there were 144 homes for sale which equated to a 4.11 months of inventory.

Looking at this year, we are doing a lot better than last year with a 23% decrease. I’m going to keep watching this statistic. Will prices go up as fast as they did in 2005? I don’t think so, because there is not as much pressure – a higher months of inventory. But, I do think home prices are going up here at Lake Martin in 2015. We just have tons of momentum.

If you have any questions, please contact John Coley with Lake Martin Voice Realty at 334 221 5862 or emailing directly at john (at) lakemartinvoice (dot) com.

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Copyright notice – the above, and every other post on this blog, is the property of John Coley, Broker, Lake Martin Voice Realty. Appraisers may use my information in their appraisals without charge or asking, but please give me credit by citing me, my company name and title, and website address of http://lakemartinvoice.com. If anyone else would like to use this information, please contact me here and ask. I probably will let you do it, just please ask!

(*)Disclaimers: All of the above info was taken from the Lake Martin Area Association of RealtorsMultiple Listing Service. Accuracy is not guaranteed but deemed reliable. The above does not include sales by FSBOs or developers that sell privately and not through the MLS. But, I do think that the above represents a very large majority of all waterfront sales on Lake Martin, Alabama.

Yes, you read that right. The Lake Martin real estate market is doing well this summer. June of 2015 beat last year in sales by 44%. That’s not the only good news! If you look at the year to date, we are selling well ahead of the prior year. 2015 is beating 2014 by 26%! That is impressive because 2014 was a record year of home sales on Lake Martin, even better than 2005.

ACRE pointed out on AL.com that supply is down 6.8% and we are still having rising demand and sales even with a lesser supply. You can read more from this article on AL.com by clicking HERE.

Another factor that is incredible is that lot sales are pacing far ahead this year as well. We have sold 46 lots through the Lake Martin MLS. That’s all realtors and all brokerages in the Lake Martin area. Last year at this time we had sold 25 lots through the MLS, and last year was a great year for lot sales.

March 2015 was another great month for Lake Martin waterfront home sales.

The graph below was provided by the Alabama Center for Real Estate (ACRE). On it you can see the number of homes sold monthly and the amount of inventory in the Lake Martin area during those months. ACRE’s chart showsthe months of March for 2007 through 2015.

March has been consistently been a good month for Lake Martin waterfront home sales.(*) In 2015, 36 homes were sold in the month of March. This number includes sales from all brokerages and real estate agencies that participate in the Lake Martin MLS. In 2014, there were 28 homes sold in the month of March, so there was an 8 home increase in sales from 2014 to 2015. This is impressive, because 2014 was a record year for sales. The previous record year for sales was in 2005, when 30 waterfront homes were sold in March.

Lake Martin Home Price Changes?

A question I hear a lot is, “if Lake Martin home sales are up, what about prices?”

It’s a great question. When I looked back at the entire year of 2014, I did not see evidence of a huge price increase for waterfront property. What I saw, maybe, was a slight increase. Perhaps a couple of percent, but it’s hard to parse the numbers that tightly. Looking forward, I think you have to consider the amount of waterfront homes for sale right now on Lake Martin.

There are currently 358 homes for sale right now in the Lake Martin MLS. In comparison, there were 324 homes for sale at this time in 2014. Back in 2005, there were 180 homes for sale and prices went up from 2005 to 2006. To emphasize this point, I cut the ACRE chart down to only the years of 2005, 2014, and the current year. For example, in 2005, when we had 180 homes for sale and selling 30 homes a month, it was only 6 months of inventory being sold.

I think that 2015 will be the first year in a while that we will be able to go up in price. I don’t think we will see huge (30%) price jumps like we saw in 2005 because of the ratio of sales to inventory. But I do think we have a pretty good chance for a home price increase here at Lake Martin.

Only time will tell, so check back for more market reports as the year goes on.

Do You Need Help At Lake Martin?

I’m a full time real estate agent here at Lake Martin. I write these market reports help my clients. Do you need help with buying or selling at Lake Martin, please contact me, John Coley, by using this contact form, calling me at 334 221 5862 or emailing directly at john (at) lakemartinvoice (dot) com.

Copyright notice – the above, and every other post on this blog, is the property of John Coley, Broker, Lake Martin Voice Realty. Appraisers may use my information in their appraisals without charge or asking, but please give me credit by citing me, my company name and title, and website address of http://lakemartinvoice.com. If anyone else would like to use this information, please contact me here and ask. I probably will let you do it, just please ask!

(*)Disclaimers: All of the above info was taken from the Lake Martin Area Association of Realtors Multiple Listing Service. Accuracy is not guaranteed but deemed reliable. The above does not include sales by FSBOs or developers that sell privately and not through the MLS. But, I do think that the above represents a very large majority of all waterfront sales on Lake Martin, Alabama.

Often, I’m asked, “How is the market doing in 2015 compared to 2014?” In short, I think its doing great! If you look at the graph below provided by the Alabama Center for Real Estate, you can see that February 2015 sales doubled from February 2014. In February 2015, sales were at 14, compared to sales at 7 in February 2014.

The yellow line, represents the inventory levels. The levels are the same, and certainly a lot better than they were in the dark days of 2007. Overall, when you look at the big picture, you can see that supply on the inventory side is similar and demand on the sale side is similar. We are poised for another great year here at Lake Martin.